Petroleum Minister Refuses to Meet Refineries Representatives
Staff Report
Islamabad: The newly appointed Petroleum Minister has refused to hold a meeting with oil refineries to resolve the issue of sales tax exemptions that are going to hit $6 billion refining projects.
The oil refineries have estimated a Rs 34 billion loss during the current financial year due to the issue of sales tax exemption.
Sources said that the petroleum minister had scheduled a meeting with refineries several times on this subject but skipped the meeting at the eleventh hour.
The oil industry believed that delaying tactics in holding meetings with oil refineries was meant to prolong the issue till the upcoming budget.
The government had made amendments to the Finance Act 2024 and changed the sales tax status of petroleum products (petrol, high-speed diesel, kerosene oil, and light diesel oil) from zero-rated to exempt supplies.
This caused refineries to deny input sales tax claims, pushing the operational and capital costs of local refineries upwards.
Oil refineries are believed to suffer a loss of Rs 18 billion whereas the oil marketing companies are said to sustain a loss of Rs 14 billion during the ongoing financial year.
The oil refineries had planned to start work on upgrade works with the commitment of a $6 billion investment.
The Oil Companies Advisory Council (OCAC), a body of the oil industry had taken up the matter with the former petroleum minister but the issue was not resolved so far.
Now, the oil industry is expecting new petroleum minister Ali Pervez Malik to address the issue of sales tax exemptions but he has also delayed a meeting with oil refineries representatives.
